SEARS ROEBUCK: EXPANDING MEDICARE HMO OPTION TO RETIREES

      Sears Roebuck & Co. will expand its Medicare risk HMO
 program next year because local pilot programs have been so
 successful, BUSINESS INSURANCE reports.  "We've gone forward
 aggressively with this and come a long way in a short period of
 time," said Marybride Misar, a Sears benefits planning analyst. 
 Sears will offer Medicare HMO enrollment to an additional 40,000
 of its 113,000 covered retirees "as a means to trim the $120
 million" it spends annually on retiree health benefits. 
 Currently, 5,800 retirees are in Medicare HMOs under pilot
 programs launched last year in Arizona, California and Florida
 and in "numerous other retiree locations nationwide."  Starting
 January 1, Sears will offer managed care to retirees in at least
 35 locations, according to Misar.  Additionally, Sears will offer
 33,000 employees near retirement the option to join the HMOs,
 stay in them after retirement and "lock in their benefits in
 Medicare risk HMOs."
      WAY TO GO:  Misar said that Sears expects one in five
 retirees who are eligible for managed care to enroll in one of
 the plans.  If Sears "can offer Medicare risk HMOs to 40% of its
 retirees, and if 20% of those eligible sign up, the company can
 save $17 million a year," according to Misar.  She noted that
 Sears is "encouraged at the level of participation in the HMOs so
 far."  BUSINESS INSURANCE reports that about 18% of Sears'
 managed care eligible retirees select the option, and of those
 who have enrolled in managed care only two percent have returned
 to the traditional Sears insurance plan.  
      WHAT THIS MEANS:  Joseph Martingale, a consultant with the
 Towers Perrin consulting firm, said that "aggressive initiatives
 like Sears' program may mean a virtual transference of retiree
 health care to managed care."  He added that managed care may be
 the "most sensible course for companies" trying to cut retiree
 health costs (Kazel, 9/23 issue).